disclosure_of_acting_as_principal_or_other_interest
Table of Contents
Disclosure of Acting as Principal or Other Interest
Licensees must disclose when they have a personal interest in a transaction.
Acting as Principal
A licensee is acting as a principal when buying, selling, or leasing property for themselves.
- Must disclose licensed status
- Must disclose ownership interest
- Disclosure must be made to all parties
- Disclosure must be in writing
- Applies whether or not a commission is received
Other Interest in a Transaction
A licensee must disclose any interest that could influence their judgment.
- Ownership interest (direct or indirect)
- Option to buy or sell
- Financial interest in the property or transaction
- Relationship with a party that creates a conflict of interest
Timing of Disclosure
- As soon as possible
- Before entering into a binding agreement
- Prior to acceptance of an offer
Purpose of Disclosure
- Prevent fraud and misrepresentation
- Allow informed consent
- Protect the public
- Maintain fiduciary duty of loyalty
Consequences of Failure to Disclose
- Disciplinary action by the DRE
- Civil liability
- Possible rescission of contract
- Loss of commission
disclosure_of_acting_as_principal_or_other_interest.txt · Last modified: by reidjs